IN THE SUPREME COURT OF VICTORIA	Not Restricted	
AT MELBOURNE
COMMERCIAL DIVISION
COMMERCIAL LIST
S ECI 2022 00208

BETWEEN:

CAASON INVESTMENTS PTY LTD (ACN 089 590 858)	Plaintiff	
		
v  		
		
INTERNATIONAL LITIGATION PARTNERS NO. 3 LTD (REGISTRATION NO 1662762) & ANOR
(according to the attached Schedule)	Defendants	

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JUDGE:	Irving AsJ 	
WHERE HELD:	Melbourne	
DATE OF HEARING:	31 May 2022	
DATE OF RULING:	15 June 2022	
CASE MAY BE CITED AS:	Caason Investments Pty Ltd v International Litigation Partners No. 3 Ltd  & Anor	
MEDIUM NEUTRAL CITATION:	[2022] VSC 329	

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COURTS AND JUDGES – Courts - Cross-vesting – Concurrent jurisdiction of different courts – Application for transfer to Federal Court of Australia – Interests of justice - Jurisdiction of Courts (Cross‑vesting) Act 1987, s 5 - BHP Billiton Ltd v Schultz (2004) 221 CLR 400.

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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiff	R Flory, solicitor	Flory Partners	
			
For the Defendants	C van Proctor 	Quinert Rodda & Associates Pty Ltd	

HIS HONOUR:
Introduction
1	Caason Investments Pty Ltd (plaintiff) entered into a litigation funding agreement by which International Litigation Partners No 3 Ltd and International Litigation Partners No 3 Pte Ltd funded a class action in the Federal Court of Australia (Federal Court) brought by the plaintiff and another applicant on behalf of class members.  The original funding agreement was between the plaintiff and the first defendant and made on 7 December 2012 (Funding Agreement).  On the same day, the plaintiff and the first defendant agreed to vary the funding agreement such that the first defendant agreed to pay the plaintiff its reasonable legal, accounting and administrative costs in connection with the class action (Side Letter).  On 29 January 2015, the plaintiff was notified that the first defendant had assigned its interest and obligations under the Funding Agreement to the second defendant. 
2	Under the terms of the Side Letter, the plaintiff was entitled to be reimbursed its reasonable legal, accounting and administrative costs in connection with the class action.  The Side Letter required the plaintiff to file business activity statements to recover the full goods and services tax (GST) component of the legal costs paid by the defendants and make the amount equal to the GST component of the legal costs available to the defendants.  The plaintiff claimed GST refunds from the Australian Taxation Office (ATO) in relation to the legal costs paid to 30 June 2017.  It received a refund from the ATO and lodged further GST refund claims.  The ATO conducted a review of its decision to refund the GST and, on 15 January 2019, finally concluded the plaintiff was not entitled to claim GST refunds in relation to legal costs paid by the defendants. 
3	On 27 January 2022, the plaintiff filed a writ and statement of claim.  By that statement of claim, the plaintiff alleges that the defendants have breached the Side Letter by not paying the plaintiff’s reasonable legal, accounting and administrative costs in connection with the class action (Side Letter Contractual Claims).
4	The plaintiff’s writ is not the first proceeding involving this specific issue between the parties.  In fact, the issue has been raised but not resolved in the Federal Court.  The history of the dispute is helpfully set out in the judgment of Murphy J in Caason Investments Pty Ltd v Cao (No 3).  I gratefully adopt his Honour’s summary.  Relevantly, in that decision Murphy J determined an interlocutory application by the class action applicants, including the plaintiff in this proceeding, that amounts be paid to them from the settlement fund for costs of their application for representative costs pursuant to the settlement approval orders that had been made on 6 December 2017 and for legal, accounting and administrative costs claimed to have been incurred by the plaintiff of which the second applicant in the class action proceeding had agreed to pay a share.  Murphy J was also considering an interlocutory application by the plaintiff in this proceeding seeking the relief the plaintiff seeks in this proceeding, i.e. the Side Letter Contractual Claims.  Murphy J did not decide this aspect of the proceeding ‘because Caason failed to comply with the timetable set for filing its application and evidence in support’.  Murphy J’s decision addresses his reasons for refusing to allow the plaintiff to file its application out of time.  
5	The defendants have filed a summons seeking orders that this proceeding be transferred to the Federal Court under s 5(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Jurisdiction of Courts (Cross-vesting) Act) and that the plaintiff provide security for the defendants’ costs of this proceeding.  During the hearing the parties confirmed that if I decided that the proceeding should be transferred to the Federal Court it was unnecessary to determine the defendants’ security for costs application.
6	For the reasons set out below, I have decided that having regard to the interests of justice it is more appropriate that this proceeding be determined by the Federal Court.  That being the case, I will order that the proceeding be transferred to the Federal Court and dismiss the defendants’ security for costs application.
Relevant legislation and principles
7	Section 5(1) of the Jurisdiction of Courts (Cross-vesting) Act provides:
(1)	Where –
(a)	a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court; and
(b) 	it appears to the Supreme Court that –
(ii)	having regard to –
(A) 	whether, in the opinion of the Supreme Court, apart from any law of the Commonwealth or another State relating to cross-vesting of jurisdiction and apart from any accrued jurisdiction of the Federal Court or the Family Court, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the Supreme Court and capable of being instituted in the Federal Court or Family Court;
(B)	the extent to which, in the opinion of the Supreme Court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the Commonwealth and not within the jurisdiction of the Supreme Court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction; and
(C)	the interests of justice –
it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court, as the case may be –
the Supreme Court shall transfer the relevant proceeding to the Federal Court or the Family Court as the case may be.  
8	The principles involved in determining applications to transfer proceedings under this legislation were not in dispute.  The defendants submitted these principles include:
(a)	it is not necessary to determine that this Court is a ‘clearly inappropriate’ forum, but rather that it is ‘both necessary and sufficient that, in the interests of justice, the [Federal Court] is more appropriate’; 
(b)	the term ‘interests of justice’ has been given a liberal construction and should be read widely; 
(c)	the interests of justice are to be judged by objective factors, such as to facilitate identification of the natural forum in which it might be expected that the dispute would fall to be resolved, with its concomitant juridical advantages and disadvantages for each party, whatever they may be; 
(d)	the question on the transfer application calls for a ‘nuts and bolts’ management decision as to which court, in the pursuit of the interests of justice, is the more appropriate forum to hear and determine the substantive dispute; 
(e)	when identifying the more appropriate forum, relevant considerations include cost and efficiency in the respective jurisdictions.  
9	Given the Federal Court’s decision in Caason Investments Pty Ltd v Cao (No 2) and the Full Federal Court’s decision in Caason Investments Pty Ltd v International Litigation Partners No 3 Ltd, there was no dispute that the plaintiff’s proceeding commenced in this Court was capable of being instituted in the Federal Court.
10	The dispute between the parties is contractual in nature and unlikely to turn on the application, interpretation or validity of a law of the Commonwealth.
11	Given this, the focus of the parties’ submissions was on whether the interests of justice favour the transfer of the proceeding to the Federal Court.
The defendants’ submissions
12	The defendants submitted that the following factors favoured the transfer of the proceeding to the Federal Court:
(a)	the Funding Agreement the subject of the parties’ dispute concerns a proceeding that is still on foot in the Federal Court: proceeding NSD1558 of 2012;
(b)	the Federal Court has already determined that: 
(i)	it has jurisdiction to hear the contractual dispute between the parties;
(ii)	there is a risk of inconsistent findings if the Side Letter Contractual Claims were heard by different courts;
(iii)	it would be quicker, less expensive and more efficient for the Federal Court rather than another court to determine the rights and obligations of the plaintiff and the defendants in relation to the GST refunds issue and their Side Letter Contractual Claims, consistently with the overarching purpose; and
(iv)	the plaintiff has not remitted any GST refunds to the first defendant ‘and so does not appear to have an immediately enforceable right’ (I take this aspect of the defendants’ submission to mean that the Federal Court has already made factual findings relevant to the dispute in this proceeding);
(c)	the Federal Court has already observed the close relationship between the subject matter in this proceeding and the class action proceeding in the Federal Court.  If this proceeding continues in this Court, there is a risk of inconsistent findings and it would be necessary for this Court to consider and analyse events that have occurred in the Federal Court; and
(d)	the Federal Court is familiar with the subject matter of the proceeding and so it is likely that a transfer of the proceeding would be more efficient and less expensive than maintaining the proceeding in this Court.  If the proceeding is maintained in this Court ‘it will mean starting all over again.  Evidence already adduced and considered in the Federal Court proceedings would need to be adduced and considered again in this proceeding’.
The plaintiff’s submissions
13	The plaintiff’s primary submission was that its proceeding is a simple contractual dispute involving a debt which this Court is competent to hear and determine.
14	The plaintiff conceded that its Side Letter Contractual Claim, which is the subject of this proceeding, had at one time been ‘comingled’ with its other reimbursement claims, which have now been heard and determined by the Federal Court.  The plaintiff submitted, however, that any comingling came to an end when Murphy J declined to grant the plaintiff leave to bring its Side Letter Contractual Claim. 
15	The plaintiff placed significant emphasis on the following passage from Murphy J’s judgment:
The prejudice to [the plaintiff] caused by a refusal to grant leave to bring its interlocutory application late is a loss of opportunity to pursue the Variation Letter Costs Claim before this Court, on the hearing dates fixed.  I accept that [the plaintiff] will suffer some prejudice as a result of the decision to refuse to grant leave, but nevertheless consider it appropriate that leave be refused.  [The plaintiff] can bring a new proceeding seeking its Variation Letter Costs in a competent court, when it is ready to do so. 
16	The plaintiff submitted that in the above passage Murphy J did not direct that the plaintiff’s Side Letter Contractual Claim be brought back before him and nor did the defendants make any submission to his Honour that it should.  Further, the plaintiff submitted that the above passage indicated that his Honour ‘did not want the Federal Court, and His Honour [sic], in particular to adjudicate the costs matter but wanted it heard elsewhere’.
17	The plaintiff submitted that the defendants’ reliance on findings made by Murphy J in Caason Investments Pty Limited v Cao (No 2) were misplaced because events have overtaken those findings.  His Honour’s findings in that decision included that:
(a)	there would be a risk of inconsistent findings if the plaintiff’s Side Letter Contractual Claim were heard by a different court to the one that determined the plaintiff’s reimbursement claims;
(b)	'[i]t will be quicker, less expensive and more efficient for [the Federal Court] rather than another to determine the rights and obligations of [the plaintiff] and [the defendants] in relation to the GST Refunds Issue and their Variation Letter Costs Claims, consistently with the overarching purpose’; and
(c)	‘[the plaintiff’s] entitlement to Variation Letter Costs appears to be contingent on a future act of performance by it – remitting the GST refunds to [the defendants].  [The plaintiff] has not remitted any GST refunds to [the defendants] and so it does not appear to have an immediately enforceable right.’ 
18	The plaintiff pointed out that since that judgment was published the status of the ATO rulings in relation to the plaintiff’s GST claims had been clarified and his Honour had refused to grant the plaintiff’s leave to bring their Side Letter Contractual Claim.
19	The plaintiff submitted that the final settlement fund distributions have been made in the Federal Court class action proceeding and that the plaintiff cannot adjudicate its Side Letter Contractual Claim in that proceeding.  I note that the defendants did not concede that the Federal Court class action proceeding had been closed.
20	The plaintiff submitted that if the proceeding was transferred to the Federal Court, there was no guarantee that the matter would be allocated to Murphy J, and that if another judge was allocated there would be no costs savings or greater efficiency than if the proceeding remained at this Court. 
21	Finally, the plaintiff submitted that it was a corporation based in Victoria and that both defendants were corporations based overseas, and so Victoria was the natural forum for the proceeding.  
Consideration
22	There is no dispute between the parties that the plaintiff’s proceeding could have been brought in either this Court or the Federal Court.  The central issue is whether, having regard to the interests of justice, it appears to this Court that it is more appropriate for the proceeding to be heard and determined by the Federal Court. 
23	The plaintiff’s current proceeding is in essence the Side Letter Contractual Claim it unsuccessfully sought leave to bring in the Federal Court.  That claim relates to an agreement between the plaintiff and the defendants that the plaintiff was entitled to be reimbursed for its ‘reasonable costs for [its] own legal, accounting and administrative work’, including the time of senior company officers, calculated at specified rates.  The plaintiff’s costs, for which it seeks reimbursement, are costs it says it incurred in the Federal Court class action proceeding.
24	The issues raised in the plaintiff’s proceeding share some of the factual substratum of the related cases that have been heard and determined by the Federal Court.  The plaintiff has previously attempted to bring this claim in the Federal Court and other claims relating to the plaintiff’s costs have been determined by that Court.  In my view, the Federal Court is the natural forum for the plaintiff’s proceeding.
25	I accept the plaintiff’s submission that the findings made by Murphy J in Caason Investments Pty Ltd v Cao (No 2) should be approached with some caution given subsequent events and litigation between the parties.  That is not however to say that his Honour’s findings should be completely disregarded. 
26	I am unable to accept the plaintiff’s submission that Murphy J has directed the plaintiff to file its Side Letter Contractual Claim in another court or indicated that he does not want the claim to be heard either by himself or the Federal Court.  Both parties agreed that the Federal Court currently has jurisdiction to hear the claim.  Murphy J was not dictating that the plaintiff should commence its proceeding in another court but rather stating any prejudice to the plaintiff because of his decision not to grant it leave to file the Side Letter Contractual Claim was limited to losing the hearing dates then scheduled in the Federal Court and further ameliorated by the fact that the plaintiff could bring its claim at a later date when it was ready to do so. 
27	The interests of justice favour the transfer of the proceeding to the Federal Court.  While it would be inappropriate for this Court to speculate which judge may ultimately hear and determine the plaintiff’s claim, there are likely to be less risks of inconsistent findings if the plaintiff’s current claim is determined in the same court that determined other aspects of the claims the plaintiff has made in its personal capacity, as opposed to its capacity as a lead applicant in the class action.  There is also a very real possibility of costs savings if the plaintiff’s current claim is heard by the Federal Court, where other evidence relevant to the claim may have already been filed.
28	Having regard to the matters required by s 5(1) of the Jurisdiction of Courts (Cross‑vesting) Act, it appears to me that it is more appropriate for the plaintiff’s proceeding to be determined by the Federal Court.  I will order that the plaintiff’s proceeding be transferred to the Federal Court.
29	Having determined that the plaintiff’s proceeding should be transferred, it is unnecessary for me to consider the defendants’ application for security for costs.  I will dismiss that aspect of the defendants’ application.
30	I will hear from the parties on the question of costs.  

SCHEDULE OF PARTIES

		
	S ECI 2022 00208	

BETWEEN:		

CAASON INVESTMENTS PTY LTD (ACN 089 590 858)	Plaintiff 	
		
- v -		
		
INTERNATIONAL LITIGATION PARTNERS NO. 3 LTD (REGISTRATION NO 1662762)	First Defendant	
		
INTERNATIONAL LITIGATION PARTNERS NO 3 PTE LTD (REGISTRATION NO 201426242N)	Second Defendant